Welcome to our latest issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring Point72 Asset Management losing about 10% in January, Millennium Management on a hiring spree, and hedge fund industry's assets under management swell to nearly Read More
- US: Dow: 13254.30 (-0.39%), S&P 500: 1429.08 (-0.61%), NASDAQ: 3104.02 (-1.03%)
- Europe: CAC: 3506.05 (-0.37%), DAX: 7213.70 (-0.01%), FTSE: 5793.20 (-0.03%).
- Asia-Pacific: Australia: 4333.80 (0.18%), China: 2134.89 (0.33%), Hong Kong: 19827.17 (0.13%), India: 5363.45 (0.09%), Japan: 8869.37 (-0.03%).
- Metals: Gold: 1731.80 (-0.50%), Silver: 33.63 (-0.17%), Copper: 3.69 (1.19%)
- Energy: Crude Oil: 96.54 (0.12%), Natural Gas: 2.81 (4.85%)
- Commodities: Corn: 7.83 (-2.03%), Soya Bean: 17.18 (-1.02%), Wheat: 8.89 (-1.69%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2761 (0.45%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5990 (0.23%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.2550 (0.03%)
- 10 year US Treasury: 1.654% (-0.014)
Market and Economy News Update
U.S. markets end lower: U.S. markets snapped a three-day winning streak to end near the session low on Monday as investors remained cautious ahead of the Federal Reserve’s latest policy meeting, later this week. Tech stocks were the biggest losers in trade today, with Intel Corporation (NASDAQ:INTC) down 3.8 percent. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 52.35 points, or 0.39 percent, to close at 13,254.29. The S&P 500 (INDEXSP:.INX) slumped 8.84 points, or 0.61 percent, to end at 1,429.08, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) erased 32.40 points, or 1.03 percent, to finish at 3,104.02.
Oil prices rise higher: Oil prices gained in a choppy session on Monday as investor hopes for fresh stimulus measures from the Federal Reserve outweighed weak Chinese data. Crude oil for October delivery rose 0.1 percent, to settle at $96.54 a barrel on the New York Mercantile Exchange. Brent oil for October settlement gained 0.4 percent to $114.75 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Apple Inc. (NASDAQ:AAPL) ended 2.6 percent lower after hitting an all-time high of $683.29 a share as investors await the much expected launch of the new iPhone at its media event in San Francisco on Wednesday.
- Microsoft Corporation (NASDAQ:MSFT) may raise its quarterly dividend by 15 percent later this month, according to a Bloomberg report.
- Social game maker Zynga Inc (NASDAQ:ZNGA) said that chief revenue and marketing officer Jeff Karp, who joined a little more than a year ago, has resigned.
- Gambling-equipment company Shuffle Master, Inc. (NASDAQ:SHFL) reported fiscal third quarter profit of $10.4 million, or 18 cents a share, on revenue of $63.4 million. Analysts were expecting a profit of 20 cents a share on revenue of $68 million.
- Convenience-store chain Casey’s General Stores, Inc. (NASDAQ:CASY) reported fiscal-first-quarter profit of $1.01 per share that beat the average analysts’ estimate of 95 cents per share. Revenue stood at $1.87 billion that trailed estimates of $1.93 billion.
- Discount retailer Five Below Inc (NASDAQ:FIVE) reported second quarter earnings excluding one-time items of 4 cents a share, on revenue of $87 million that easily beat the consensus estimate of earnings excluding items of 1 cent a share on sales of $82 million. The company also provided better than expected full-year outlook.
- Publisher John Wiley & Sons Inc (NYSE:JW.A) reported fiscal first quarter adjusted earnings of 52 cents per share. Revenue declined 4 percent to $410.73 million from $430.07 million in the same period last year. The company also reaffirmed its full year profit outlook.
- Peregrine Pharmaceuticals (NASDAQ:PPHM) reported fiscal first quarter loss of loss $7.7 million, or 7 cents per share, on revenue of $4.3 million. Analysts had forecast a loss of 11 cents per share and $4 million in revenue. On Friday, the company said a recent Phase II trial of its cancer drug bavituximab produced interim data that showed that it doubled the length of time lung cancer patients survived.
- Hardware stores operator Orchard Supply Hardware Stores Corp (NASDAQ:OSH) posted second-quarter loss of $26.7 million or $4.44 per share, compared to a profit of $3.9 million or 65 cents per share in the year-ago quarter. Revenues for the quarter came in at $194.1 million, down from $196.4 million in the same quarter last year.
- Biotechnology firm Biogen Idec Inc. (NASDAQ:BIIB) has agreed to sell the royalty rights to its lupus drug Benlysta, to Canadian investment management firm DRI Capital. Separately, analysts at UBS AG downgraded the stock to “neutral” from “buy.”
- Piper Jaffray initiated coverage on user review website Yelp Inc (NYSE:YELP) with a “neutral” rating and a price target of $26.
- Heating, ventilation and air conditioning-systems provider KSW, Inc. (NASDAQ:KSW) surged 22 percent after it agreed to be acquired by privately-owned real estate firm Related Companies for $5 a share in cash, or about $32 million.
- BlackRock, Inc. (NYSE:BLK), the world’s largest ETF provider, is planning to lower the fees on some of its core exchange traded funds in the fourth quarter, Chief Executive Officer Laurence Fink said on Monday.
- Specialty chemicals maker TPC Group Inc (NASDAQ:TPCG) today urged shareholders to vote in favor of the $627 million buyout of the company by private equity firms, First Reserve Corp and SK Capital Partners.
- Israel’s Perion Network Ltd (NASDAQ:PERI) ended 8.4 percent higher after raising its full-year outlook for revenue and profit amid improvements in its operations.
- Biopharmaceutical company Geron Corporation (NASDAQ:GERN) said it halted a Phase 2 study of its experimental breast cancer drug, imetelstat, after it failed in a trial.
Hedge Fund News Update
- Hedge fund managers and other big speculators raised their bullish net long positions across commodities to above $111 billion (69 billion pounds) in the week ending September 4, the highest level in more than a year, according to data issued by the U.S. Commodity Futures Trading Commission.
- Most of the Paulson & Co.’s hedge funds recorded gains in August, with the Gold Fund being the stand-out performer, with gains of 11 percent last month.
- Hedge funds gained 1.30 percent quarter to date as of September 5, according to the Bank of America Merrill Lynch investable hedge fund composite index, with equity long/short and convertible arbitrage funds providing the best returns during the period.
- Banking giant Wells Fargo & Company (NYSE:WFC) today announced that its hedge fund administration and middle-office service provider, LaCrosse Global Fund Services, will now be known as Wells Fargo Global Fund services.
Brokerage Upgrades and Downgrades on Monday, September 10, 2012
- Advanced Micro Devices, Inc. (NYSE:AMD) was raised to “neutral” from “sell” by analysts at Goldman Sachs.
- American Eagle Outfitters (NYSE:AEO) was lifted to “buy” from “neutral” by analysts at Sterne Agee with a target price of $27.
- Cabot Oil & Gas Corporation (NYSE:COG) was upgraded to “buy” from “hold” by analysts at Stifel Nicolaus with a target price of $54.
- Dover Corporation (NYSE:DOV) was raised to “neutral” from “underweight” by analysts at JPMorgan Chase with a target price of $61.
- Kraft Foods Inc (NASDAQ:KFT) was lifted to “outperform” from “sector perform” by analysts at RBC Capital Markets with a target price of $44.
- NextEra Energy, Inc. (NYSE:NEE) was upgraded to “outperform” from “market perform” by analysts at Wells Fargo & Co.
- NRG Energy Inc (NYSE:NRG) was raised to “buy” from “neutral” by analysts at Goldman Sachs with a target price of $25.
- PNC Financial Services (NYSE:PNC) was lifted to “outperform” from “perform” by analysts at Oppenheimer with a target price of $75.
- Rosetta Resources Inc. (NASDAQ:ROSE) was upgraded to “buy” from “hold” by analysts at Stifel Nicolaus with a target price of $55.
- Smith & Nephew plc (ADR) (NYSE:SNN) was raised to “buy” from “sell” by analysts at Citigroup.
- Venoco, Inc. (NYSE:VQ) was lifted to “overweight” from “underweight” by analysts at JPMorgan Chase with a target price of $12.50.
- Atlas Pipeline Partners, L.P. (NYSE:APL) was downgraded to “equal weight” from “overweight” by analysts at Morgan Stanley.
- Apollo Investment Corp. (NASDAQ:AINV) was cut to “equal weight” from “overweight” by analysts at Barclays Capital with a target price of $9.
- The Bank of New York Mellon Corporation (NYSE:BK) was downgraded to “outperform” from “strong buy” by analysts at Raymond James.
- Cliffs Natural Resources Inc (NYSE:CLF) was lowered to “neutral” from “buy” by analysts at Goldman Sachs.
- Enbridge Energy Partners, L.P. (NYSE:EEP) was cut to “underweight” from “equal weight” by analysts at Morgan Stanley with a target price of $30.
- International Paper Company (NYSE:IP) was downgraded to “hold” from “buy” by analysts at Deutsche Bank.
- Targa Resources Partners LP (NYSE:NGLS) was lowered to “equal weight” from “overweight” by analysts at Morgan Stanley with a target price of $45.
- Packaging Corp of America (NYSE:PKG) was cut to “hold” from “buy” by analysts at Deutsche Bank.
- Rock-Tenn Company (NYSE:RKT) was downgraded to “hold” from “buy” by analysts at Deutsche Bank.
- Seagate Technology PLC (NASDAQ:STX) was lowered to “hold” from “buy” by analysts at Argus with a target price of $34.
- Tyco International Ltd. (NYSE:TYC) was cut to “neutral” from “overweight” by analysts at JPMorgan Chase with a target price of $60.